Sector Spotlight: FinTech
Sector Spotlight: FinTech
9 February, 2016
The UK Start-up scene is booming. In 2015, $2.3 billion was invested, which is an increase of over 60% compared to 2014. This trajectory is expected to continue into 2016. London’s technology scene is at the forefront of this growth, having attracted over 60% of the UK’s venture capital investment, according to a study by London & Partners, Mayor Boris Johnson’s promotional body.
In this series, we are going to shed light on some of the hottest Start-up sectors around and alert you to some cool companies to watch throughout 2016. Let’s kick things off with Fintech.
Financial Technology (FinTech)
The Fintech scene experienced rapid growth in 2015, attracting substantial international investment, amounting to almost a quarter of total start-up investment. Business Insider magazine recently reported that, ‘The UK is emerging as the Fintech centre of the world and London is the jewel in the crown of the UK’s Fintech success story… there has arguably never been a greater time to start and grow a digital business in London.’
So what exactly is Fintech?
Technology has had a large impact on many industries; however, until fairly recently the world of finance was relatively unaffected. A group of companies have now jumped on this gap in the market, harnessing technological advances to challenge the traditional financial system.
‘Fintech’ is the term used to refer to these emerging technology start-ups that are disrupting and challenging areas such as mobile payments, money transfers, loans, fundraising and even asset management.
In the London Fintech scene, there are a vast range of ideas including apps for stock market trading, websites that will help create entirely new currencies, and revolutionary new payment technology. All these ideas are changing the way finance works.
High profile Fintech companies
TransferWise is a peer-to-peer money transfer service launched in January 2011 by Kristo Käärmann and Taavet Hinrikus with headquarters in London and offices in Tallinn and New York.
TransferWise’s mission is simple: allowing users to transfer money abroad easily and quickly with very low costs, compared to those of high-street banks.
TransferWise was recently valued at over £640 million. To date more than £3 billion has been transferred through TransferWise and they support more than 300 currency routes across the world. Pretty impressive, huh?
Seedrs is an equity crowdfunding platform, launched in East London in 2012 by entrepreneurs Jeff Lynn and Carlos Silva. It allows users to invest in Start-up and Scale-up businesses throughout Europe for as little as £10. Not only is this a great way for people with limited capital to get involved in investment, it gives early-stage companies the chance to raise funds from friends, family, customers, angels and other independent investors in exchange for equity in the business.
As if you could need any more convincing, tennis star Andy Murray is an advisor and keen Seedrs investor.
One to watch
GoCardless is a next generation payments company, founded in January 2011. Its mission is to make it incredibly cheap and easy for anyone to take payments online using the Direct Debit infrastructure, from individuals to multi-national corporations.
GoCardless is rapidly becoming the preferred online direct debit option for businesses; and as of July 2015, the company handles $1bn worth of transactions per year.
Does working in the exciting world of FinTech appeal to you? We frequently have graduate jobs and internships available in this sector, so be sure to check them out over on our Vacancies page.
If you want to learn more about some of the UK’s hottest companies, we have other posts in this Start-up Sector Spotlights series, including Wearable Tech, Food Delivery & Security.
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